Asian Market Update: Japan automakers suffer after Toyota results, Nissan-MMC tie-up rumors
***Economic Data***
- (AU) AUSTRALIA MAY CONSUMER INFLATION EXPECTATION: 3.2% V 3.6% PRIOR; 8-month low
- (JP) JAPAN MAR CURRENT ACCOUNT BALANCE: ¥2.98T V ¥2.97TE; ADJUSTED CURRENT ACCOUNT: ¥1.89T V ¥1.91TE; TRADE BALANCE: ¥927B V ¥907BE
- (JP) JAPAN APR BANK LENDING (INCL TRUSTS) Y/Y: 2.2% V 2.0% PRIOR; BANK LENDING (EX- TRUSTS) Y/Y: 2.2% V 1.9%E
- (KR) SOUTH KOREA APR EXPORT PRICE INDEX M/M: -3.4% v -1.2% PRIOR; Y/Y: -5.7% v -4.5% PRIOR
- (KR) South Korea Mar "L" Money Supply m/m: 0.9% v 0.6% prior; M2 Money Supply m/m: 0.8% v 0.5% prior
- (KR) South Korea Apr Bank Lending to Households (KRW): 654.3T v 649.0T prior
- (NZ) NEW ZEALAND APR FOOD PRICES M/M: 0.3% V 0.5% PRIOR
- (NZ) NEW ZEALAND APR MANUFACTURING PMI: 56.5 v 54.7 PRIOR; 3-month high
- (UK) APR RICS HOUSE PRICE BALANCE: 41% V 35%E
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -0.4%, S&P/ASX -0.5%, Kospi flat, Shanghai Composite -0.3%, Hang Seng -0.5%, Jun S&P500 +0.1% at 2,060
***Commodities/Fixed Income***
- June gold -0.1% at $1,274/oz, June crude oil flat at $46.23/brl, Jul copper +1.0% at $2.12/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 2.6 tonnes to 841.9 tonnes; 6th straight increase; highest since Dec 2013
- JGB: (JP) Japan's MOF sells ¥733.7B in 0.8% 30-year bonds; Avg yield: 0.319% (record low) v 0.388% prior; Bid to cover: 3.01x v 3.39x prior
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.4959 V 6.5209 PRIOR; 2nd straight firmer setting; strongest Yuan setting since May 4th
- (CN) PBOC to inject CNY50B in 7-day reverse repos
***Market Focal Points/FX***
- Asian equity markets are tracking the selling on Wall St, where retreat in consumer stalwarts Disney and Macy's have raised some questions going into the key US retail sales report on Friday. Despite the bounce in crude oil, markets in Australia are underperforming, with shares of AMP particularly soft after Q1 update.
- In Japan, shares of Toyota are down 2% after a 6% decline in US ADRs following FY15 results and FY16 outlook where the automaker cut op profit forecast by over 30%. Stronger Yen was seen as a key factor in disappointing guidance. Nissan is down 1.4% after press speculation that it could take a 30% stake in Mitsubishi Motors, whose shares are halted. Nissan also reports FY results later today.
- Among notable Asia press, China govt is supposedly exerting more pressure on analysts to do away with negative reports on economy and companies. (Australian press) Kyle Bass repeated his warning on China at Skybridge conference, likening today's markets to Mar/Apr of 2007. Shanghai Composite briefly fell below 2,800 - 2-month low.
- BOJ Gov Kuroda said Japan economy continues moderate recovery trend, adding that large downside risks to Japan economy and external uncertainties pose large risks. Kuroda also reiterated that low oil prices and fx factors contributed to soft inflation conditions. BOJ also released its summary of opinions at the latest meeting and controversial decision to leave rates on hold. While members agreed that downside risks are growing, they agreed to allow negative rate policy to work through before any further measures.
- USD has firmed up in the Asia session and gold prices slid about $7 to $1,273. USD/JPY was up about 50pips above 108.70, AUD/USD down 50pips at $0.7330, and NZD/USD in a 25pip range above 0.6810. Yuan fix was set higher for the 2nd day.
***Equities***
US equities / ADRs:
- JACK: Reports Q2 $0.85 v $0.70e, R$361M v $361Me; +10.9% afterhours
- CA: Reports Q4 $0.60 v $0.57e, R$1.01B v $993Me; +4.1% afterhours
- WB: Reports Q1 $0.07 v $0.03e, R$119.3M v $96.3M y/y; +3.6% afterhours
- SINA: Reports Q1 -$0.04 v $0.03e, R$196.1M v $204Me; -3.9% afterhours
Notable movers by sector:
- Consumer discretionary: Hankook Tire Co 161390.KR +3.3% (selected as main supplier for Tesla); Meiji Holdings Co. 2269.JP +11.2% (FY15/16 result); Myer Holdings MYR.AU +7.1% (Q3 result); Aristocrat Leisure ALL.AU +9.9% (guidance)
- Financials: Hong Kong Exchanges & Clearing 388.HK -2.2% (Q1 result); Credit Corp CCP.AU +5.1% (affirms guidance); AMP AMP.AU -6.1% (Q1 result)
- Industrials: Toyota Motor Corp 7203.JP -2.9% (FY15/16 result); Sumitomo Chemical Co 4005.JP -2.6% (FY15/16 result); Isuzu Motors 7202.JP +2.7% (FY15/16 result)
- Technology: Asustek Computer 2357.TW +3.1% (Q1 result)
- Energy: JX Holdings 5020.JP +0.8% (FY15/16 result)